We Think Some Shareholders May Hesitate To Increase Matrix IT Ltd.'s (TLV:MTRX) CEO Compensation

Key Insights

• Matrix IT's Annual General Meeting to take place on 23rd of December
• Total pay for CEO Moti Gutman includes ₪3.59m salary
• Total compensation is 3,520% above industry average
• Over the past three years, Matrix IT's EPS grew by 9.5% and over the past three years, the total shareholder return was 11%

Under the guidance of CEO Moti Gutman, Matrix IT Ltd. (TLV:MTRX) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 23rd of December. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Matrix IT

Comparing Matrix IT Ltd.'s CEO Compensation With The Industry

According to our data, Matrix IT Ltd. has a market capitalization of ₪5.6b, and paid its CEO total annual compensation worth ₪21m over the year to December 2023. That's a notable increase of 26% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₪3.6m.

In comparison with other companies in the Israel IT industry with market capitalizations ranging from ₪3.6b to ₪11b, the reported median CEO total compensation was ₪591k. Accordingly, our analysis reveals that Matrix IT Ltd. pays Moti Gutman north of the industry median. Moreover, Moti Gutman also holds ₪33m worth of Matrix IT stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₪3.6m	-	17%
Other	₪18m	₪17m	83%
Total Compensation	₪21m	₪17m	100%

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Matrix IT pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Matrix IT Ltd.'s Growth Numbers

Over the past three years, Matrix IT Ltd. has seen its earnings per share (EPS) grow by 9.5% per year. Its revenue is up 7.7% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Matrix IT Ltd. Been A Good Investment?

Matrix IT Ltd. has served shareholders reasonably well, with a total return of 11% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Matrix IT that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.